It may be a good idea, but I have some questions about the rules pertaining to each of these three. A large bank is any bank with equity over $5 billion. That includes the big five Bank of Montreal, Royal Bank, TD Bank, Scotiabank and CIBC.
Then there is a mid-size bank with equity between $1 billion and $5 billion. My friend from the Bloc Quebecois was referring to this. That includes la Banque Nationale which is a fairly large bank based in the province of Quebec, the Banque Laurentienne and the Bank of Western Canada. The wide ownership rule does not apply to them. For them, only 35% of the equity or voting shares have to be widely held. In other words, an individual could purchase 65% of the shares of la Banque Nationale, the Banque Laurentienne or the Bank of Western Canada. That is a real concern in the province of Quebec and elsewhere. Why would we have different rules apply to these banks which are a bit smaller than those which apply to the Royal Bank, CIBC and Bank of Montreal?
The Chase Manhattan Bank or Citibank of New York could buy la Banque Nationale just like that. The headquarters would go out of Quebec and Canada and we would lose an important part of our banking industry. Why has the minister decided to have different rules and regulations for mid-size banks compared with big banks? Why can the minister himself change the rules? Why is parliament not supreme in changing those kinds of rules?
There is also a third category of bank called the small banks. They are banks with equity of under $1 billion. There are no restrictions at all on the ownership of small banks. The hon. member for Kamloops, Thompson and Highland Valleys could start a bank. It could go up to $1 billion with no restriction on ownership. He could give it away as a gift to one of his friends in Finland or wherever he wants. There are no rules or restrictions at all. We could have the bank of Tim Hortons across the country. There could be the bank of Safeway or Loblaws. The bank of Tim Hortons could be the biggest bank if it keeps on going the way it is.
There are no rules or regulations. It is totally unrestricted with regard to ownership. We are asking why there is this great change and this great difference between small, medium and large banks. This is of particular interest in the province of Quebec with la Banque Nationale.
Outside the wide ownership rule a second concern I have with the legislation as written is that far too much power is being given to the Minister of Finance. I see the parliamentary secretary across the way shaking his head. We have seen a disturbing trend for the last 20 or 30 years. More and more power is taken from the Parliament of Canada which represents the people of the country and put in the hands of the Minister of Finance, other ministers and in effect in many cases in the hands of senior bureaucrats. The parliamentary secretary can confirm that the Minister of Finance can change some of these ownership rules with the stroke of a pen without going back to parliament.
In effect the minister has become a banking czar who can determine many things such as whether or not, for example, a merger will go ahead. In the legislation there is now a process for mergers, but it is only a process for mergers.
It is the minister himself or herself, whoever that minister may be, who will make a decision about mergers in the future, whether it is a good merger or a bad merger, according to the process that is set in place. Why should that not be parliament? Why should it not be the finance committee that recommends to parliament whether or not a merger is good or bad for the people of this country? Why not democratize this institution and make meaningful the role of a member of parliament elected by the people? Yet, this power is concentrated in the hands of the Minister of Finance concerning mergers, acquisitions, ownership rules and many other things. In this bill of 900 pages, the power is with the new banking czar, the Minister of Finance.
Some Liberals across the way say that we have a very competent Minister of Finance. Even if we concede that, and that is very questionable because no human being should have that power, he will not be the Minister of Finance for much longer. There will soon be somebody else.
Do we want to give this kind of power to the member for Wild Rose, for example, if he becomes Minister of Finance, or to the member for Brandon—Souris if he becomes the Minister of Finance? That is what is written in the legislation. This bill is saying to hand power over to the Minister of Finance to make important decisions over mergers, acquisitions, ownership rules, regulations and so on.
Even when it comes to the banking ombudsman, the guidelines are not written. There have been memoranda of understanding. There will be all kinds of rules and regulations that are still being debated and decided by the Minister of Finance and sometimes not even recommended by the cabinet of this country.
We are going in the wrong direction in terms of the lack of power in the House of Commons and about authority being taken out of the House of Commons and transferred to the Minister of Finance and transferred to bureaucrats, however competent they may be. That power should be here in the House because we are responsible to the people and we are accountable every three, four or five years to the people in our ridings. That is where the power should reside.
I mentioned the consumer agencies. I think that in principle many of these agencies are going in the right direction. I do not think they have enough power or legislative clout to adequately protect consumers. Many of the rules and regulations are still being decided in terms of guidelines and the memorandum of understanding.
I referred already to mergers to a certain extent. We have in the bill the guidelines and the process as to what must happen when a merger occurs. These guidelines are common sense guidelines in terms of a public debate. We need a process where the details are revealed as to why the parties want to merge and the like. It is the Minister of Finance who has the power. It would be similar to what happened in 1998-99 when the TD and the CIBC wanted to merge and when the Royal Bank and the Bank of Montreal wanted to merge. It was the Minister of Finance after pressure from the public, instigated primarily by our party and our friends on the progressive side of the Canadian population, who started to make this an issue across the country.
In my last minute, there is nothing here to establish a community reinvestment act. There is nothing here that will prevent bank branch closures except the notice in the cities of four months or a notice in the rural areas of six months, but there is no empowerment of the community that would prevent a closure if that bank branch were profitable, so again it is a Mickey Mouse approach.
The final point is that there is nothing here in terms of taxes on banks. We all heard the news a while back where the Minister of Finance, because of current changes in the tax system based on 1999 profit levels, was giving the banks an extra tax cut of $500 million a year. These are the most profitable companies in the country and yet they are getting big tax cuts.